IoT in Supply Chain Management: RFID, Logistics & Privacy

Introduction to the Internet of Things

The Internet of Things (IoT) is the model for the methodology behind the evolution of the internet. The IoT is a dynamic and evolving web of information connecting the digital world to the tangible world using sensors within the RFID chip. "There were 1.3 billion radio-frequency identification tags (RFIDs) and two billion mobile service users, worldwide, in 2005." (Buckley, 2006) The definition of IoT can be more properly expanded to include a global network that tracks movement and information on any sensory input. Researchers have described "a future ubiquitous sensor-enabled network that collects commercial and personal data associated with objects in public and private settings." (Cute & Young, 2008) In short, "The Internet of Things describes a worldwide network of intercommunicating devices." (Buckley, 2006)

The importance of IoT to supply chain management lies in the fact that "in supply chain settings, the need for secure and selective visibility for data sharing is significant for commercial entities." (Cute & Young, 2008) Additional researchers define IoT as information that needs to move from point A to point B, and the speed of that transfer is inherently a competitive advantage. To accomplish this, the IoT must become "a network of billions or trillions of machines communicating with one another." In what is called the Internet of Things, "sensors and tiny devices (actuators) embedded in physical objects — from roadways to pacemakers — are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet." (Chui, Loffler, & Roberts, 2010)

The link to supply chain management is readily apparent. "Traditional supply chains are evolving into complex networks with numerous stakeholders." (Hribernik, Warden, Thoben, & Herzog, 2010) The use of technology to track movement through the supply chain is the product of IoT. RFID chips on packages enable real-time tracking of goods throughout the world. "Finally, the structure effect indicates an individualization of transport on the micro-logistics level." (Hribernik et al., 2010)

At the heart of IoT as an enabler is the Domain Name System (DNS). DNS enables the transition from raw digital information to real-world linkage, matching "numerical addresses to human-readable names." (Cute & Young, 2006) The IoT thus enables information relay and exchange using RFID from sensory communication. The most specific purpose of this capability is to enhance the value of the supply chain — a system of linkage from one stage of progress to the next, where each movement adds value to the end consumer either through product development or through movement of the finished product via package shipping. This may be best described as encompassing "general supply chain and product management, supply chain integration, product life cycle integration, inventory management, spare-part warehousing, warehouse management, warehouse batching for delivery, quality control, serial number look-up, and field service management." (Buckley, 2006)

References

Buckley, J. (2006). From RFID to the Internet of Things: Pervasive networked systems. Presented March 6–7, 2006, CCAB, Brussels.

Cute, B., & Young, M. (2008). Finding your way in the Internet of Things. Afilias Whitepaper. Retrieved from www.afilias.info

Chui, M., Loffler, M., & Roberts, R. (2010). The Internet of Things. The McKinsey Quarterly, 2010(2).

Hribernik, K., Warden, T., Thoben, K., & Herzog, O. (2010). An Internet of Things for transport logistics: An approach to connecting the information and material flows in autonomous cooperating logistics processes. Presented at MITIP 2010, Aalborg University, Denmark.